Minjie Liu has the following sources of income and deductions: What is Minjie's Net Income for Tax Purposes?
A)$47,000
B)$40,000
C)$45,000
D)$49,000

Question

Minjie Liu has the following sources of income and deductions:  What is Minjie's Net Income for Tax Purposes?
A)$47,000 
B)$40,000 
C)$45,000 
D)$49,000

Quizplus · Accepted Answer

To calculate Minjie's net income for tax purposes, we need to add up all of the income sources and then subtract any allowable deductions.

Income sources: 
- Salary: $50,000 
- Investment income: $5,000

Total income: $55,000

Deductions: 
- RRSP contribution: $4,000 
- Charitable donations: $6,000

Total deductions: $10,000

Net income for tax purposes: $55,000 - $10,000 = $45,000

Therefore, the best choice is option C.

Minjie Liu Has the Following Sources of Income and Deductions